A former union boss turned federal senator says his dismissal of a leadership rival at the shop workers’ union was a coincidence.

Former union boss turned federal Labor senator Chris Ketter says it was a complete coincidence that he expelled an 18-year veteran from the shop workers’ union a day after the man announced a leadership challenge.

Senator Ketter went to the home of Shop, Distributive and Allied Employees’ Association (SDA) organiser Alan Swetman on May 22, 2013, and took away his union-issued car, the Royal Commission into Trade Union Governance and Corruption heard on Monday.

Mr Swetman was off work sick and did not come to the door.

Senator Ketter was then the secretary-treasurer of the SDA Queensland branch.

The repossession was followed by a letter, delivered by courier the same day, telling Mr Swetman he was suspended from the SDA over poor performance and misuse of his union mobile phone and had less than a day to give reasons why he should be dismissed.

The commission heard Mr Swetman had announced a day earlier that he planned to run against Mr Ketter for the secretary role, the first challenge to Mr Ketter since 1996.

Senator Ketter, who entered parliament in July, told counsel assisting the commission Jeremy Stoljar SC it was “a complete coincidence” he moved against Mr Swetman at the same time.

The disciplinary action was taken because Mr Swetman had shown “a complete breakdown of the employment relationship”, Senator Ketter said.

He told the commission Mr Swetman had been verbally cautioned about his performance and misuse of his mobile phone, including advertising the number for his private business, six months earlier.

On May 23, Mr Swetman was sent a letter terminating his employment.

Challenged by Mr Stoljar on whether he was seeking to get Mr Swetman out of the union before nominations closed on May 24, Senator Ketter said: “That had nothing to do with it.”

“So an 18-year employee, who was unwell and had a medical certificate, was terminated on May 23 after having first received written notice some time on the day before?” Mr Stoljar asked.

Senator Ketter said it was “about very serious issues”.

The commission heard Senator Ketter had been one of three signatories to a $408,000 “fighting fund” operated over 30 years by the SDA to use in election campaigns to protect the position of incumbent executives.

Up to 40 union officials at any one time, including Mr Swetman during his employment, were required to pay $48 a month into the fund in addition to their union fees.

However, the commission heard that payment of union fees and the fighting fund fee did not mean officials were actually members of the union.

Mr Swetman pursued his election challenge after being expelled from the SDA, but the union gained a Federal Court ruling that he was not a union member, therefore not eligible to run for office.

Senator Ketter had drawn $100,000 from the fighting fund to support the legal action, the commission heard.

The hearing before Commissioner Dyson Heydon continues on Tuesday.